The latest FNB Estate Agent Survey for the second quarter of 2025 reveals a slight cooling in South Africa’s residential property market. While activity and sentiment have dipped compared to the previous quarter, the affordable housing segment continues to shine, driven by interest rate cuts and increased demand from first-time buyers.
The survey, based on responses from estate agents nationwide, provides valuable insights into what’s happening on the ground, regionally and across different price segments.
Market activity: a softer quarter
According to the FNB Activity Index, overall market activity slipped from 6.3 in Q1 to 5.9 in Q2, reflecting a mild slowdown in buying and selling activity. This is not unexpected during the winter months, but economic uncertainty is also contributing to the situation.
That said, affordable homes under R750,000 continue to perform well, with activity recorded at 6.2. This is higher than both the traditional and upper-end markets.
Only 17% of agents described the market as "highly active" (a score of 8 to 10), down from 23% in the first quarter, showing a broad softening.
Expectations for the next quarter
Looking ahead to Q3, just 34% of agents expect activity to improve, a notable decline from 46% previously. The affordable segment remains the most optimistic, with 66% expecting higher activity, buoyed by the recent interest rate cut. Expectations for the traditional market, however, dropped sharply to 23%.
Agent sentiment: mixed confidence
Agent satisfaction with current market conditions also softened, falling to 62% in Q2 from 68% in Q1, according to the FNB survey.
However, there was a notable rise in sentiment in the affordable market, jumping from 58% to 72%—the highest across all price bands. This stands in contrast to the R750k–R1.6m segment, where sentiment plunged from 59% to 45%, likely due to affordability concerns and economic headwinds.
Regional trends: diverging paths
While national property activity cooled slightly in Q2 2025, the FNB Estate Agent Survey shows that performance varied widely across South Africa’s key provinces. Some regions experienced stronger buyer activity despite a dip in sentiment, while others saw both measures decline. These variations reflect localised challenges and opportunities—from administrative disruptions to infrastructure issues and shifting buyer confidence.
Here’s how the major regions fared this quarter:
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Gauteng: Activity fell to 5.7 (from 6.1), and sentiment declined to 66% (from 75%). The temporary closure of the Johannesburg Deeds Office may have impacted this.
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Western Cape: Activity dropped significantly (5.9 from 7.2), but sentiment held steady at 67%, showing consistent confidence.
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KwaZulu-Natal: Activity improved to 6.3, but sentiment declined slightly to 47%, likely influenced by ongoing infrastructure concerns.
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Eastern Cape: Activity rose to 6.1, but sentiment saw a sharp drop from 66% to 56%, suggesting a disconnect between transaction volume and agent confidence.
Selling times remain stable, with some improvement
The average time a home spent on the market remained unchanged at around 12 weeks, according to the FNB report.
The R1.6m–R2.6m segment saw the quickest turnaround, with homes selling in 10 weeks, slightly faster than the previous quarter. In contrast, homes under R750k took the longest to sell, at around 14 weeks.
Price trends: discounts still the norm
Price adjustments remain a common feature in today’s property market, with most sellers needing to negotiate down to close a deal. According to the survey, while there’s been a slight improvement in the percentage of homes selling below asking price, it’s clear that buyer caution and price sensitivity still dominate, particularly in the traditional market. The affordable segment, however, continues to show slightly more pricing resilience.
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75% of homes sold below asking price, slightly better than 78% in Q1.
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Affordable market sellers saw average discounts of 11%, but only 42% of homes sold below asking.
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In the traditional market, 86% sold below asking, showing greater price sensitivity.
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Just 1% of homes sold above asking price, mostly in areas with limited stock and strong demand.
Financial pressure is still a factor in selling
Understanding why homeowners are selling provides important context for interpreting market trends. The survey shows that financial pressure remains a significant motivator, even as other reasons such as life-stage transitions and upgrading continue to drive movement. Despite lower interest rates, many households are still navigating economic strain, especially in the mid-market.
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21% of sales were due to financial pressure, only slightly down from 22% last quarter.
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Life-stage downscaling remains the top reason for selling (24% of sales).
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Emigration-related sales remained low at 5%, far below the long-term average of 8%.
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Upgrading held steady at 12%, despite lower borrowing costs.
Buyer activity: first-time buyers and investors gaining ground
Despite the broader market slowdown, first-time buyers and buy-to-let investors are becoming more active, especially in the affordable segment. Their growing presence highlights where buyer demand is concentrating and suggests continued strength at the lower end of the market. The FNB survey points to affordability and rental income potential as key drivers behind this shift.
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First-time buyers made up 26% of all purchases in Q2, up from 24% in Q1.
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In the affordable market, their presence was even more pronounced—46%, up from 40% previously.
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Buy-to-let investors accounted for 12% of transactions, with more activity in the affordable segment (19%) compared to just 6% in the traditional market.
Final thoughts: a market in flux, with pockets of resilience
The FNB Estate Agent Survey paints a picture of a property market adjusting to a changing environment. While overall activity and sentiment have cooled slightly, the affordable housing market remains a bright spot, attracting both buyers and investors.
Uncertainty around the Government of National Unity (GNU) and the broader economy has weighed on sentiment. However, recent political stabilisation and interest rate cuts have injected some optimism, especially into the lower-priced segments.
If you’re a buyer in the affordable market, the current environment—with lower rates and manageable competition—could offer a prime opportunity. For sellers, aligning price expectations with market realities remains crucial.
